Housing Prices In Thailand Expected To Rise 6-10% Next Year

[george]

Housing prices expected to rise 6-10% next year

BANGKOK: -- Housing prices are expected rise by 6-10 per cent next year in part due to reduced launches by property developers, particularly small ones, according to a bank executive.

Siam Commercial Bank (SCB) executive vice president Rungrueng Sukkerdpiboon for retail lending products said interest rates are forecast to edge up and the government’s measures to stimulate the property sector through tax reductions are unlikely to be extended next year.

Simultaneously, prices of construction materials have begun to increase.

These factors could fuel housing prices next year.

He said SCB has targeted making Bt55 billion in loans for new homes this year. In the first nine months of the year, the bank had already loaned Bt40 billion in the housing market.

Mr Rungrueng said he believed non-performing loans would continue to decline as the economic slowdown had not made it difficult for customers in the housing group to service debts.

NPLs in SCB’s housing loan portfolio are projected to remain below 2.5 per cent of the outstanding loans for this year.

In the first nine months of 2009, NPLs stood at 2.5 per cent against 2.6-2.7 per cent at the end of the previous year, he said.

-- TNA 2009-11-03

[JR Texas]

Dream............dream, dream, dream....................dream.........dream, dream, dream...............

[givenall]

Dream............dream, dream, dream....................dream.........dream, dream, dream...............

Let me remand you that most of wealthy people money is made from land or house purchases. By far owning land or home are the best long-term investments anywhere in the world

[bkkjames]

Well I don't think you need to be an economist to figure out that if the developers who build cheap houses put less of them on the market, while the expensive developers continue to build at the same pace, the average should go up.

[chiang mai]

This is in keeping with the (confirmed) idea that property bubbles are forming in a number of countries throughout the region so perhaps not as silly as it seems.

[RubbaJohnny]

Who needs a crystal ball whe you can read the book

Firstly no sales of land to foreigners

Thais seldom lower prices rather sit on them

Disposal net incomes are lowere and far less vistors to speculate on condos

You wouldny expect credit providers to own up sp when you can be jailed for merely translating bloomberg

Sure there will be folks making cash from rel esate there always are

a free market I think not

I may be wrong but I think itll be a few years before non Baht values are hiked

Since start of year baht has devalued against many countries from 21-32 for Oz $

Or put it another way your investmebt in Oz $ was about fourfold the projected property rise

[JR Texas]

This is in keeping with the (confirmed) idea that property bubbles are forming in a number of countries throughout the region so perhaps not as silly as it seems.

Optimists? Property bubbles? That sounds good.

Well, maybe you should be working for GM.

The bottom line is what buyers are willing to do.

Where are the buyers? Thais? Foreigners?

The real estate market has not yet hit bottom.

[chiang mai]

Almost all currencies have fallen against AUD so probably not a good example.

[TAWP]

For the prices to go up that sharply there has to be a lot of foolish people around. During a crash prices should first go down...here they did not. So them 'going up again' quickly is only a manufactured bobble by some that wanna make a quick buck again.

[Rama]

It's not far fetched. If you look at housing values in China and Vietnam or agricultural land values in Vietnam or African nations compared to Thailand, Thailand remains a real value, not taking into account the fact that the infrastructure here is much better than any of the other places mentioned. I know several wealthy Thais that are continuously buying plots of land that they consider to be undervalued on the world real estate market. They hold for 20 or 25 years with no expectation of any short term return.

[neverdie]

More BEAT UP news by the very industry people trying to profit from the market.

Most Thai property up 6-10% in a single year get real!

[trogers]

More BEAT UP news by the very industry people trying to profit from the market.

Most Thai property up 6-10% in a single year get real!

Heck! I am looking for 15-18% rise by end of next year and looking to double my money by 2015 - the next peak.

[mdechgan]

Even if they do increase they will never be in the area of the an "investement."

My neighbor bought his house for 3m 10 years ago. A similar house next to his was sold for 1.9m. Even if my neighbor reduces his price to 3m from his advertised 3.5m it will be nowhere near the opportunity cost of the interest lost from borrowing the money to buy the house and the interest lost for just keeping the money in the bank for 10 years compound interest.

My father in-law bought a townhouse in Bang Bua Thong for 1m 6-7 years ago, he is trying to sell for 800,000 still no takers.

Other than Silom, Ratchada, etc. the suburban market is really bad unless you happen to have a home on a major street.

Even if you have takers very few have the cash to buy immediately (housing loans are tough in Bkk) and is the selling price worth the 5% capital gains tax?

[neverdie]

More BEAT UP news by the very industry people trying to profit from the market.

Most Thai property up 6-10% in a single year get real!

Heck! I am looking for 15-18% rise by end of next year and looking to double my money by 2015 - the next peak.

In Thailand ????

It would most certainly be based on what you were holding, on general run of the mill type residential property, doubling in value in the next 5 years ...... I dont think so!

Please elaborate

[trogers]

Even if they do increase they will never be in the area of the an "investement."

My neighbor bought his house for 3m 10 years ago. A similar house next to his was sold for 1.9m. Even if my neighbor reduces his price to 3m from his advertised 3.5m it will be nowhere near the opportunity cost of the interest lost from borrowing the money to buy the house and the interest lost for just keeping the money in the bank for 10 years compound interest.

My father in-law bought a townhouse in Bang Bua Thong for 1m 6-7 years ago, he is trying to sell for 800,000 still no takers.

Other than Silom, Ratchada, etc. the suburban market is really bad unless you happen to have a home on a major street.

Even if you have takers very few have the cash to buy immediately (housing loans are tough in Bkk) and is the selling price worth the 5% capital gains tax?

Where is Bang Bua Thong???

[Thai at Heart]

Housing prices expected to rise 6-10% next year

BANGKOK: -- Housing prices are expected rise by 6-10 per cent next year in part due to reduced launches by property developers, particularly small ones, according to a bank executive.

Siam Commercial Bank (SCB) executive vice president Rungrueng Sukkerdpiboon for retail lending products said interest rates are forecast to edge up and the government’s measures to stimulate the property sector through tax reductions are unlikely to be extended next year.

Simultaneously, prices of construction materials have begun to increase.

These factors could fuel housing prices next year.

He said SCB has targeted making Bt55 billion in loans for new homes this year. In the first nine months of the year, the bank had already loaned Bt40 billion in the housing market.

Mr Rungrueng said he believed non-performing loans would continue to decline as the economic slowdown had not made it difficult for customers in the housing group to service debts.

NPLs in SCB’s housing loan portfolio are projected to remain below 2.5 per cent of the outstanding loans for this year.

In the first nine months of 2009, NPLs stood at 2.5 per cent against 2.6-2.7 per cent at the end of the previous year, he said.

-- TNA 2009-11-03

Interest rates up=Less demand

Interest rates up=Baht strengthens=less exports=job losses

Interest rates up=Baht strengthens=cost of oil down

Inputs up=production cost up=increased price=less demand

Tax Breaks removed=less demand

Economy is crap=less demand

Less new projects=less supply

New production costs may go up, but so what if there are less buyers.

I fail to see the economic logic of why the "prices" of houses should go up at all, but then TIT.

Edited November 3, 2009 by Thai at Heart

[thaihome]

Its worth noting that he did not say sales would go up, but the cost would go up. Certainly rising interest rates, expiration of the temporary tax reduction, and rising cost of material would all contribute the cost going up.

TH

[neverdie]

I've got no idea about property, however, I made the majority of my money from the Australian property market, I know where I will keep my investments stack and its not here in bricks and mortar.

[bkkjames]

Does anyone besides me question the motive of such article.

Here you have a banker saying he expects prices to go up (hurry up and buy one people) in one sentence and then says the target to loan out another 15 billion baht (come get a loan from me) before the end of the year. Sounds like it could have been written by a certain property agent.

It took me awhile to read between the lines. Sorry Rung, I ain't falling for it.

[Thai at Heart]

Its worth noting that he did not say sales would go up, but the cost would go up. Certainly rising interest rates, expiration of the temporary tax reduction, and rising cost of material would all contribute the cost going up.

TH

Housing prices are expected rise by 6-10 per cent next year

Prices or costs? Hopefully something is lost in translation here, or I wouldn't want this guy working in my bank.

Presumably this should be house building costs? Not prices of housing? In which case an extremely confusing article.

The fourth point he makes in his not particularly lucid analysis is that input costs will increase. If that is the point of the article, shouldn't that come at the beginning?

Ordinarily sales are priced and production is costed at least where I do business.

Edited November 3, 2009 by Thai at Heart

[thaihome]

Do you think the interview was in English?

TH

[Thai at Heart]

Do you think the interview was in English?

TH

Doesn't matter really, either he screwed it up, the journalist screwed it up, or the translator screwed it up.

Either way, the production cost of houses may go up. So what? The costs could go up 1000%, but all that would mean is that no one could afford them and developers wouldn't make any money, demand and prices for older houses would go up.

Hardly an earth shattering problem.

The point of his article is actually that developers are expected to make less profit next year.

[bkkjames]

Do you think the interview was in English?

TH

Doesn't matter really, either he screwed it up, the journalist screwed it up, or the translator screwed it up.

Either way, the production cost of houses may go up. So what? The costs could go up 1000%, but all that would mean is that no one could afford them and developers wouldn't make any money, demand and prices for older houses would go up.

Hardly an earth shattering problem.

The point of his article is actually that developers are expected to make less profit next year.

You gleaned this from that article? Amazing indeed.

[mrbojangles]

A mate of mine bought a 2.5 mil house a couple of years ago. He'd love to just lose 6-10% never mind make 6-10% on it. He can't get rid for 2 mil at the moment.

IMO the article is just trying stir up interest. If someone for whatever reason really needs to buy an house, then anyone with more than 2 cells rattling around in their brain, would go for one of the countless bargains of second hand houses, rather than a new one.

[thefalang]

Housing prices expected to rise 6-10% next year

BANGKOK: -- Housing prices are expected rise by 6-10 per cent next year in part due to reduced launches by property developers, particularly small ones, according to a bank executive.

Siam Commercial Bank (SCB) executive vice president Rungrueng Sukkerdpiboon for retail lending products said interest rates are forecast to edge up and the government's measures to stimulate the property sector through tax reductions are unlikely to be extended next year.

Simultaneously, prices of construction materials have begun to increase.

These factors could fuel housing prices next year.

He said SCB has targeted making Bt55 billion in loans for new homes this year. In the first nine months of the year, the bank had already loaned Bt40 billion in the housing market.

Mr Rungrueng said he believed non-performing loans would continue to decline as the economic slowdown had not made it difficult for customers in the housing group to service debts.

NPLs in SCB's housing loan portfolio are projected to remain below 2.5 per cent of the outstanding loans for this year.

In the first nine months of 2009, NPLs stood at 2.5 per cent against 2.6-2.7 per cent at the end of the previous year, he said.

-- TNA 2009-11-03

The is a typical example of irrational propaganda intended to bolster the weakening Thai estate market. Most of the article doesn't make sense at all.

The unnamed "bank executive" that was quoted in this article should be demoted to sweeping floors. He obviously didn't take economics 101 in college(if he ever attended college in the first place!).

[MaiChai]

Thai property market is a bubble waiting to burst. Prices are becoming very similar to UK prices and yet the average income is 1/5 of a UK resident. Doesn't market forces and supply and demand apply in Thailand? Or are people too polite to state the obvious that most property is over priced and they are not prepared to pay it? What about the banks; don't they value property for the purpose of lending?

[animatic]

More BEAT UP news by the very industry people trying to profit from the market.

Most Thai property up 6-10% in a single year get real!

Wouldn't that be Beat Off news,

since most prospective buyers are

getting stroked royally in the next year or so.

[chiang mai]

Thai property market is a bubble waiting to burst. Prices are becoming very similar to UK prices and yet the average income is 1/5 of a UK resident. Doesn't market forces and supply and demand apply in Thailand? Or are people too polite to state the obvious that most property is over priced and they are not prepared to pay it? What about the banks; don't they value property for the purpose of lending?

[trogers]

Either way, the production cost of houses may go up. So what? The costs could go up 1000%, but all that would mean is that no one could afford them and developers wouldn't make any money, demand and prices for older houses would go up.

Eureka! You have pointed out the reason I am expecting the value of my condo units to increase 15-18% next year, and doubling in 2015.

[Thai at Heart]

Either way, the production cost of houses may go up. So what? The costs could go up 1000%, but all that would mean is that no one could afford them and developers wouldn't make any money, demand and prices for older houses would go up.

Eureka! You have pointed out the reason I am expecting the value of my condo units to increase 15-18% next year, and doubling in 2015.

Location, location, location for condos in Bangkok. By 2015, hopefully all of the condo projects that have just started now will have sold out. I wish you luck.